GIO DOWNGRADED; AMP GROUP ON WATCH NEG

Business Editors 
MELBOURNE, Australia--(BUSINESS WIRE)--Standard & Poor's--
Aug. 16, 1999--Standard & Poor's today downgraded its ratings on GIO
group companies in Australia and New Zealand by two rating notches (see
list below). At the same time, Standard & Poor's placed on CreditWatch
with negative implications the ratings of GIO Australia Holdings Ltd.
group companies and various AMP Ltd. group companies. 
The rating actions follow GIO's announcement today of a
significant deterioration in the financial performance of the its
reinsurance operations, resulting in a net loss for the group of A$743
million for the year ended June 30, 1999. The sharp escalation in
reinsurance losses to A$759 million calls into question the quality of
GIO's reinsurance risk business and the adequacy of retrocessional
protection. Further, the losses will have a very substantial negative
impact on GIO's capital base and balance sheet, in the absence of an
infusion of supplementary capital, and will delay earnings recovery
for the larger group. GIO's capital resources were weakened by a A$315
million capital return and dividend payment early this year, announced
during the hostile takeover bid by AMP. New management had planned a
A$250 million-A$300 million subordinated debt issue to restore the
capital base to more supportive levels. The scope and timing of this
additional capital support now needs to be readdressed. 
AMP's ratings are placed on CreditWatch with negative
implications, reflecting the potential financial call on the group to
support GIO and the decline in the value of its substantial investment
in GIO, stemming from GIO's reduced earnings outlook and franchise
position, Standard & Poor's said ---CreditWire 


RATINGS DOWNGRADED AND
PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
                                                 Rating
                                             TO          FROM

GIO General Ltd.(1)
  Counterparty credit rating Local currency  A+          AA
  Insurer financial strength rating          A+          AA
GIO Australia Holdings Ltd.
  Counterparty credit ratings Local currency BBB+/A-2    A/A-1
GIO Finance Ltd.(1)
  Counterparty credit ratings Local currency BBB+/A-2    A/A-1
  A$500 million domestic CP                  A-2         A-1
GIO Insurance Ltd.(1)
  (including New Zealand Branch)
  Counterparty credit ratings Local currency BBB+         A
  Insurer financial strength rating          BBB+         A
GIO General New Zealand Ltd.(1)
  Counterparty credit ratings Local currency BBB+         A
  Insurer financial strength rating          BBB+         A
AA-GIO Insurance Ltd.
  Counterparty credit ratings Local currency BBB+         A-
  Insurer financial strength rating          BBB+         A-

(1)  Guaranteed by GIO Australia Holdings Ltd.

     RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS

                                              Rating

AMP Life Ltd.
  Counterparty credit rating Local currency   AAA
  Insurer financial strength rating           AAA

AMP Life Ltd. (New Zealand Branch)
  Counterparty credit rating Local currency   AAA
  Insurer financial strength rating           AAA

Pearl Assurance PLC (Long-term Fund) Counterparty credit rating Local
  currency AAA Insurer financial strength rating AAA

Pearl Assurance PLC (General Insurance Fund)) Counterparty credit
  rating Local currency AAA Insurer financial strength rating AAA

AMP Bank Ltd.

     Counterparty credit ratings AA/A-1+ AMP Group Holdings Ltd.

     Counterparty credit ratings AA/A-1+ AMP Group Holdings Ltd./AMP
(UK) Finance Services PLC /AMP Group Finance Services Ltd.

  US$4 billion debt securities program
  (Gtd.: AMP Group Holdings Ltd.)             AA/A-1+

AMP (UK) Finance Services PLC/AMP Group Finance Services Ltd.
  US$2.5 billion Euro commercial paper program
  (Gtd.: AMP Group Holdings Ltd.)             AA/A-1+

AMP Group Finance Services Ltd.

  A$2 billion domestic commercial paper/medium-term note program
  (Gtd.: AMP Group Holdings Ltd.)             AA/A-1+

AMP (U.K.) PLC

  UKGBP100 million unsecured bonds due 2001     AA
  Sterling commercial paper prog.             A-1+

OTHER AMP GROUP RATINGS UNCHANGED

AMP General Insurance Ltd.

  Counterparty credit rating Local currency   A
  Insurer financial strength rating           A

AMP General Insurance Ltd. (New Zealand Branch)
  Counterparty credit rating Local currency   A
  Insurer financial strength rating           A

 
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